March 6 (Bloomberg) -- China Railway Construction Corp., builder of more than half the nation's rail links since 1949, raised the maximum HK$18.3 billion ($2.35 billion) sought in a Hong Kong initial stock sale, people familiar with the deal said.

The Beijing-based company sold 1.71 billion new shares at HK$10.70 each, the top end of a range marketed to investors, said the two people, declining to be identified before an official statement. The sale represents a 14 percent stake.

China Railway Construction also raised $3.13 billion in Shanghai, completing the largest IPO in Asia-Pacific this year even as falling markets prompted at least 65 companies worldwide to cancel or delay sales. The company attracted Yale University, owner of North America's second-biggest college endowment, and Singapore's Temasek Holdings Pte as investors.

``It's a vote of confidence for China Railway Construction to get prominent investors such as Yale and Temasek,'' said Jeff Papp, senior analyst at Oberweis Asset Management Inc., a Lisle, Illinois-based manager of about $500 million of Greater China assets.

Hong Kong's largest first-time offering in almost a year may help the city rebound from the slowest start to its IPO market since 2000, measured by number of sales. Evergrande Real Estate Group Ltd. and owners may raise as much as $2.13 billion in a Hong Kong IPO, according to an e-mail sent by the sale's arrangers today.

Bucking Trend

China Railway Construction's sale values it at 28.7 times 2008 profit as estimated by banks arranging the sale, including Citic Securities Co., Citigroup Inc. and Macquarie Group Ltd. That's almost double the average valuation among companies on the benchmark Hang Seng Index, according to Bloomberg data.

The former railway construction unit of the Chinese military also became the first company this year to price a Hong Kong IPO at the top of a marketed range, a practice that was the norm in 2007, when the Hang Seng gained 39 percent.

Hong Kong individuals sought 291 times the number of shares set aside for them, according to a note sent to clients by Citigroup. The portion available for institutional investors was 80 times oversubscribed, the note said.

New Media Group Holdings Ltd. and Honghua Group Ltd., the only two other companies to complete Hong Kong IPOs this year, sold stock at the mid-point of their offering ranges.

China Railway Construction's Hong Kong shares begin trading March 13; the company aims to debut in Shanghai March 10.

IPO Aversion

Li Tingzhu, China Railway Construction's board secretary, and Citic Securities spokesman Raymond Tang weren't immediately reachable in their Beijing offices. James Griffiths, a Citigroup spokesman in Hong Kong, and Paul Scanlon, Macquarie spokesman in Hong Kong, declined to comment.

Companies delayed or canceled IPOs globally this year as mounting financial-institution losses linked to the U.S. mortgage market and concerns about a recession in the world's largest economy pushed stocks lower.

In Hong Kong, the world's third-biggest IPO market in 2007, four offerings were pulled this year as the Hang Seng Index sank. Almost two-thirds of companies that sold stock in 2007 have fallen below their offer prices, according to Bloomberg data.

``A lot of IPOs that were priced last year had stretched valuations that were obviously reflecting the euphoric market sentiment at the time,'' Papp said.

Railway Spending

The Chinese government plans to spend 1.25 trillion yuan ($176 billion) in the five years through 2010 to expand and upgrade its railway system, four times the investment in the previous five-year period, according to a share sale document for China Railway Construction.

China Railway Construction and rival China Railway Group Ltd. will likely be the biggest beneficiaries, with the two companies dominating the country's railroad-construction market.

China Railway Construction helped build the world's highest railway link between Tibet and Qinghai and Shanghai's high-speed ``Maglev'' line, the world's first commercial magnetic-levitation link.

It is also the nation's largest highway builder. China earmarked 3.8 trillion yuan for its transportation infrastructure in the five years through 2010, 73 percent more than the previous five years, the share sale document said.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net.

Last Updated: March 6, 2008 05:23 EST